The Programmatic Buying Hype – What You Need to Know

The term, programmatic buying, is more and more common in the media industry but few really know what it means and more importantly, how it affects both publishers and agencies, as well as advertisers.

Let’s start with a clear definition, as described by Larry Allen from Real Media Group in Business Insider.com: “Programmatic buying is the process of executing media buys in an automated fashion through digital platforms such as: exchanges, trading desks, and demand-side platforms (DSPs). This method replaces the traditional use of manual RFPs, negotiations and insertion orders to purchase digital media”. 

We can see that programmatic buying affects everyone in the industry, some in dramatic ways. Publishers must focus more on the price and placement of their inventory where either human or automated buyers must depend on highly accurate data to make their decisions. Many publishers are just putting the remnants up for sale in the programmatic exchange, when the strategy should be focused more on understanding  their properties,  potential viewers/readers and how to promote their products in this potentially rewarding marketplace. Publishers should view this shift as an opportunity that will complement their direct sales and agency buying efforts, allowing them to maximize their properties’ sell rates and minimize empty or underused advertising spots. Additionally, they ought to learn more about what they can offer to a greater pool of potential advertisers and clients and how to go about it.

We can see now how data analytics will play a large role in this new process. Agencies are preparing to offer a value added service that allows them to compete. How will they do this? Data analytics. Agencies are able to provide data to guarantee maximum returns and better positioning of the client’s marketing campaigns. Their role within the buying process is  transforming into more of a consulting and analytic resource for their clients, helping them decide when, how and where to buy ad space. They are then gathering and analyzing huge amounts of data about publisher’s performance, visitors, rates, demographics, content analysis and many other variables to identify the best options for their clients

Publishers  now have both an organizational and a technological challenge; they must provide the same level of confidence and accuracy with their offerings to position themselves ahead of the rest in the marketplace. There are major investments happening to track and control inventory management procedures – accurately (which was clearly not a priority before), and a focus on how to price their offerings and understand their viewers/readers. To do all that, gathering not only lots of data, but the right kind of data is critical. Business solutions are needed that provide a global and easy-to-analyze picture of inventory, identify trends based on previous purchases, track successful campaigns according to region, demographic, time slots, positioning, frequency, etc… The industry has the data it needs to provide this, either internally or by tapping into the ad servers, agencies, social media and even the advertisers themselves. The challenge is to use all this information effectively to allow them to make the right decisions about their products, decisions that allow them to thrive in this new programmatic buying world!

 

By | 2018-07-06T17:50:07+00:00 December 5th, 2013|Uncategorized|0 Comments
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Contributor: Adolfo Ramirez

As AKA's Media Practice Lead for more than a decade, Adolfo is an experienced consultant and project manager with a history of successful CRM and ERP projects across media and other industries. With 17 years of experience working with the Microsoft business platform, he is responsible for leading his team in designing, building, and implementing solutions that help media companies drive value.

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